MTN Group reported a $15.8 million gain from selling its Guinea-Bissau subsidiary to Telecel, while incurring a loss from the disposal of MTN Guinea-Conakry. The sales align with MTN’s strategy to streamline operations and focus on larger markets, as smaller sectors contributed only 7.3% to 2023 revenue. MTN will now shift focus to key West African markets such as Ghana and Cameroon, which accounted for 19% of its revenue.
MTN Group, the leading telecommunications operator in Africa, has reported a gain of R287 million ($15.8 million) from the sale of its subsidiary in Guinea-Bissau to Telecel. This divestment reflects MTN’s strategy to withdraw from smaller West and Central African markets, which contributed a mere 7.3% to the company’s revenue for 2023.
In October 2023, MTN accepted a binding offer from Telecel for both MTN Guinea-Bissau and MTN Guinea-Conakry, with a symbolic purchase price of $1 for each entity. The agreement was finalized on December 15, 2023, as MTN classified these businesses as held for sale starting December 31, 2023.
While the sale of MTN Guinea-Bissau yielded a financial gain, the disposal of MTN Guinea-Conakry resulted in a loss. MTN Group’s financial results for 2024 indicated that R1 370 million ($75 million) in accumulated foreign currency translation reserve loss was transferred to profit and loss upon the disposal.
Despite this loss, MTN noted that due to the net liability position in Guinea-Conakry, no additional impairment was required when assessing the lower of carrying amount and fair value less selling costs. MTN Guinea-Bissau was facing financial difficulties, including a R171 million ($9.4 million) loan default and hitting insolvency at the end of 2023, when liabilities outstripped assets.
Moving forward, MTN aims to focus on more significant West African markets such as Ghana, Cameroon, and Côte d’Ivoire, which together constituted 19% of its revenue in 2023.
In summary, MTN Group’s divestment from its Guinea-Bissau subsidiary resulted in a significant gain, consistent with its strategic focus on more lucrative markets. However, the disposal of MTN Guinea-Conakry incurred a substantial loss, impacting overall financials. The company intends to concentrate its efforts on key markets in West Africa moving forward, bolstering its position in the telecommunications sector.
Original Source: thecondia.com
